Lakala Payment Co., Ltd. (referred to as "Lakala") recently announced the completion of a buyback and cancellation of 11.4175 million shares, representing 1.45% of the company's total shares before the cancellation. This adjustment reduces the total number of shares from 788.0825 million to 776.6649 million.
This marks Lakala's second share cancellation within a year. In January 2025, the company had already repurchased and canceled 11.9375 million shares. Combined with the latest cancellation, the total repurchased shares amount to 23.355 million, or approximately 2.92% of the pre-cancellation total shares, with a buyback value of 658 million yuan.
Industry experts suggest that Lakala's buyback and cancellation strategy reflects strong financial and operational foundations. The company benefits from stable cash flow generated by its domestic and cross-border payment services, supported by its extensive small and medium-sized merchant network.
With a 2.92% share cancellation ratio and a 658 million yuan buyback, Lakala leads among ChiNext-listed companies in terms of buyback scale. In comparison, A-share companies in 2025 have repurchased shares worth 93.6 billion yuan on average, with a cancellation ratio of just 0.54%.
Beyond buybacks, Lakala has maintained consistent dividend payouts. From 2019 to the first half of 2025, the company distributed dividends totaling 2.616 billion yuan. The ability to sustain dividends while executing large-scale buybacks is rare and enhances earnings per share (EPS).
Analysts note that in a competitive payment industry with diverging valuations among leading players, Lakala's buyback signals management's confidence in long-term growth. Such actions, coupled with solid fundamentals, influence market valuation assessments.
"Cancel-and-rebuy" strategies reduce outstanding shares, creating a "tax-free dividend" effect that boosts EPS, dividend ratios, and key financial metrics like net asset value per share and P/E ratios. This approach also optimizes capital structure and operational efficiency, supporting sustainable business growth.
As industry valuation shifts from scale-driven to profit-driven, dividend and buyback strategies attract long-term capital, fostering a cycle of business growth and shareholder returns. However, sustained success depends on stable performance and consistent policies.
Amid trends like cross-border digital yuan adoption, Lakala's strategy may reshape industry competition, pushing payment firms toward value-driven growth. Yet, replicating this model requires stable profitability, clear strategic planning, and transparent governance while avoiding risks like short-term speculation or unmet transformation goals.
**Accelerating "Payment + SaaS" Transformation** In Q1-Q3 2025, Lakala reported revenue of 4.068 billion yuan and net profit of 339 million yuan, with domestic and cross-border payment volumes reaching 2.99 trillion yuan. Cross-border payments grew 77.56% year-on-year to 60.2 billion yuan, while SaaS-driven tech service revenue surged 108.75% in Q3.
The company is advancing its digital strategy, integrating AI and SaaS to transition from a "payment processor" to a "merchant solutions partner." As SMEs deepen digital transformation, demand for inventory management, membership services, and data analytics is rising, prompting payment firms to evolve. AI-SaaS integration enables end-to-end solutions, improving merchant efficiency and industry margins.
Cross-border payments remain a key growth driver, with platforms expanding SaaS offerings to overseas merchants through multi-currency settlements and localized compliance solutions. Policy support, including streamlined cross-border financial services and digital yuan trials, further aids industry development.
Looking ahead, Lakala plans to accelerate digital payments, industrial digitization, and global expansion to enhance resilience and profitability.
Comments